Digest:
A judge should not accept the opportunity of participating in an initial
public offering of stock of a corporation which is represented by an attorney
whom the judge has appointed to fiduciary positions.

May a full
time judge purchase the common stock in a corporation approved by regulatory
authorities for public trading under the following circumstances?

The judge is well acquainted
with an attorney who from time to time he has appointed to fiduciary positions.
The attorney is currently representing a corporation which is being converted
to one whose common stock will be publicly traded. All approvals are in
place and the corporation will shortly commence trading on the NASDAQ Exchange.
In advance of the first day of trading, shares are offered for purchase
to the public at a fixed price and allocated in a manner approved by the
Securities and Exchange Commission and other regulatory bodies. These shares
may not be traded before the first day of trading. May the judge avail
himself of an opportunity to buy these shares at the fixed price prior
to the first day of trading?

In the opinion of the Committee, the judge should not avail himself of
the opportunity being presented by the attorney whom the judge has "from
time to time ... appointed to fiduciary positions." That opportunity is
presumably intended or anticipated to be of some financial benefit to the
judge. And the source of this benefit is the lawyer who has been a fiduciary
appointee of the judge "from time to time." It is this fact which renders
the judge's participation unacceptable. Thus, it is not necessary to quantify
or fully explore the nature, scope and details of the benefit. For the
acceptance of the opportunity would, in our view, at the very least constitute
an appearance of impropriety in violation of section 100.2 of the Rules
Governing Judicial Conduct. 22 NYCRR 100.2. It would "convey or permit
others to convey the impression that they are in a special position to
influence the judge" (22 NYCRR 100.2[C]), and might well "cast doubt on
the judge's capacity to act impartially as a judge." 22 NYCRR 100.4(A)(1).
Further, it could also be regarded as a financial dealing that "may reasonably
be perceived to exploit the judge's judicial position." 22 NYCRR 100.4(D)(1)(a).

We further note that the State Commission on Judicial Conduct has disciplined
judges in matters involving the receipt of material benefits from fiduciaries
appointed by the judge. SeeMatter of DiFede, 1982 WL 196856
(N.Y. Com. Jud. Cond.); Matter of Chananau; 1982 WL 196854 (N.Y.
Com. Jud. Cond.).